The convertible senior notes in the offering are due in 2019. The company granted initial buyers the option to buy up to an additional $30 million principal amount of convertible notes. Buyers can convert the notes into TAL Education's American Depositary Shares if they choose, based on the starting conversion rate of 38.0431 of ADSs per $1,000 principal amount of notes.
TheStreet Ratings team rates TAL EDUCATION GROUP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TAL EDUCATION GROUP (XRS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and impressive record of earnings per share growth. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 45.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- XRS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Diversified Consumer Services industry and the overall market, TAL EDUCATION GROUP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The gross profit margin for TAL EDUCATION GROUP is rather high; currently it is at 53.14%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.20% is above that of the industry average.
- TAL EDUCATION GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TAL EDUCATION GROUP increased its bottom line by earning $0.75 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.75).
- You can view the full analysis from the report here: XRS Ratings Report